Aug. 30 (Bloomberg) -- The European Union moved to slap
tougher sanctions on Russia as Ukrainian President Petro
Poroshenko said hundreds of foreign tanks are operating in his
country and pleaded for EU help.

“We are close to the point of no return,” Poroshenko told
reporters in Brussels today during a summit of EU leaders.
“Thousands of foreign troops and hundreds of foreign tanks are
now on the territory of Ukraine.”

EU heads of state and government selected Polish Prime
Minister Donald Tusk as the bloc’s next president and Italian
Foreign Minister Federica Mogherini as chief diplomat after a
bitter contest that showed the 28-nation EU’s divisions on how
to deal with the Kremlin. Tusk has pushed for tougher sanctions
on Russia while Mogherini has favored diplomacy. Leaders also
met with Poroshenko.

The summit took place as Ukraine’s armed forces are
retreating in some areas after NATO said Russia deployed troops
and advanced equipment in Ukraine. “We have many places where
the situation is difficult now,” Oleksandr Danylyuk, an adviser
for Ukraine’s defense minister, told reporters in Kiev today.
Russia denies that it’s involved in the war in eastern Ukraine.

Russia Sanctions

EU leaders will say they’re ready to impose new sanctions
on Russia, according to draft summit conclusions obtained by
Bloomberg News. “Sanctions will certainly be strengthened,”
French President Francois Hollande said today. Finland’s Prime
Minister Alexander Stubb said he expects leaders to make a
decision in principle and let European Commission officials work
out concrete measures, as they’ve done on previous occasions.

The EU and the U.S. already have slapped visa bans and
asset freezes on Russian individuals and companies, and since
July have imposed steadily tougher sanctions targeting the
country’s energy, finance and defense industries.

Leaders disagreed about possible military assistance to
Ukraine, with Lithuanian President Dalia Grybauskaite telling
reporters before the meeting: “We need militarily to support
and send military materials to Ukraine.”

For British Prime Minister David Cameron, this isn’t the
way to go, a U.K. official said. The U.K. expects the EU to
expand penalties in areas where existing sanctions are already
in place, particularly in defense, financial and energy
industries, the official said.

OSCE Talks

Poroshenko called for military and technical assistance
from the EU. He said there will be a trilateral contact group
meeting on Monday with the Organization for Security and
Cooperation in Europe ambassador, ex-Ukrainian President Leonid
Kuchma and Russian ambassador Mikhail Zurabov.

Talks will focus on Ukrainian hostages held in Russia, the
OSCE monitoring mission, and “I cross my fingers, I hope it
will be a cease-fire,” he said, adding that he expects to
publish a draft peace plan next week.

European Commission President Jose Barroso said that more
than 1 billion euros in loans could be released to Ukraine in
the coming months. This is part of the 11 billion euro package
announced earlier.

“We are ready to consider further financial assistance
should additional needs be identified by the International
Monetary Fund during its next review mission,” he said.

‘Intense’ Battles

Fighting continued today across easternmost Ukraine with
“intense” battles in the Donetsk districts of Petrovsky and
Kuibyshevsky, the city council said on its website.

Twenty-eight Ukrainian soldiers withdrew from a rebel
encirclement near Ilovaysk and the troop pullout from the area
is continuing, the Interior Ministry in Kiev and Ukrainian
military spokesman Andriy Lysenko said.

Government forces destroyed five separatist military
vehicles and six Grad multiple rocket launchers. A Ukrainian
Su-25 ground attack plane was shot down by a Russian missile,
the Defense Ministry said in a Facebook posting.

The death toll in the conflict is almost 2,600, the United
Nations said. A total of 765 Ukrainian troops have been killed
in the fighting, the government said. Seventy-five rebels have
been killed in the past 24 hours, Lysenko said.

Ukrainian Prime Minister Arseniy Yatsenyuk has called for
parliament in Kiev to consider North Atlantic Treaty
Organization membership to protect against Russia seizing more
territory after its annexation of Crimea.

NATO Secretary General Anders Fogh Rasmussen this week
reaffirmed a 2008 Bucharest summit pledge that “Ukraine will
become a member of NATO” if it so wishes and provided it
fulfills the necessary criteria.